Bo McCarver’s weekly housing news compilation, 1-10-2012

Anticipating a done-deal, government prosecutors are expanding an offer to banks to drop charges in exchange for billions of dollars to adjust mortgages for “under-water” homeowners.

Meanwhile, Galveston shakers and movers find a new way to delay construction of public housing destroyed by Hurricane Ike three years ago.

For a pdf version of the full stories, plus contextual articles in social, environmental and legal areas, contact Bo McCarver at HYPERLINK “mailto:bmccarver@austin.rr.com” bmccarver@austin.rr.com.

DOJ contacting additional banks on mortgage deal

By Rick Rothacker and Aruna Viswantha Reuters January 10, 2012

As the government nears a deal with top U.S. banks to resolve mortgage abuses, the Justice Department has begun reaching out to other banks to gauge their interest in joining the wide-ranging settlement, according to a person familiar with the matter.

The DOJ has contacted several nationally chartered banks to determine whether they might agree to terms similar to those in the proposed deal, the person said.

State and federal officials are nearing a settlement with the five largest mortgage servicers – Bank of America Corp, JPMorgan Chase & Co, Wells Fargo & Co, Citigroup Inc and Ally Financial Inc- to resolve allegations of misconduct in processing foreclosures and other issues.

In exchange for between $20 billion to $25 billion in relief to distressed homeowners, the banks will put behind them potential government lawsuits about improper foreclosures and abuses in originating and servicing the loans.

New York has the second lowest vacancy rate in the nation. The state also posted one of the smallest effective rent increases for the year.

Bloomberg News January 6, 2012

U.S. apartment vacancies dropped to a 10-year low in the fourth quarter, allowing for rent increases that are likely to continue this year, Reis Inc. said.

The vacancy rate fell to 5.2%, the lowest since the end of 2001, the New York-based property research firm said in a report Thursday. It was 5.6% in the previous three months and 6.6% a year earlier. The average monthly effective rent, or what tenants paid after landlord giveaways, climbed 2.3% from a year earlier to $1,009, Reis reported.

Rising foreclosures and stricter mortgage-lending standards have helped make rental housing the best-performing segment of commercial real estate for the past two years. The vacancy rate has fallen for seven straight quarters from a three-decade high of 8% at the end of 2009, according to Reis.

“With the strong occupancy we had this year, we were really able to push rents,” said Lori Mason Curran, director of real estate investment strategy for the property arm of Seattle-based Vulcan Inc., which owns more than 500 units in the city that are more than 97% leased.

Hiring by local employers including Amazon.com Inc. and Microsoft Corp. drove tenant demand, enabling Vulcan to increase leasing fees 6% to 8% in 2011, Ms. Mason Curran said. Seattle’s average effective rent rose 2.7% in the fourth quarter from a year earlier, according to Reis.

Vulcan was started by Paul Allen, the billionaire co-founder of Microsoft. It is preparing to break ground on almost 500 units in Seattle this quarter, Ms. Mason Curran said.

“We’re pretty optimistic about the apartment market,” she said. Seattle’s rents may climb 5% to 7% this year, according to Ms. Mason Curran.

U.S. landlords’ asking rents rose to $1,064 from $1,043 on average a year earlier and $1,059 in the previous three months, according to the Reis report. Effective rents were little changed from the third quarter’s $1,004.

Boston’s City Life/Vida Urbana is finding success by turning conventional wisdom on its head and entering the picture after a foreclosure has taken place.

By Melvin Colon ShelterForce Fall 20122

It was a hot August day when more than a hundred people gathered outside Drusilla Francis’s home in Boston’s Dorchester neighborhood. Signs emblazoned with “We Will Not Be Moved” and other candid sentiments regarding bank behavior were on display as two policemen looked on. A constable, equipped with a moving van and orders to evict the 60-year-old Francis and her two foster children, talked frantically on the phone to his client, U.S. Bank. Perhaps he did not expect to be challenged.

Several lawyers on Francis’s side explained to the constable that he did not have the appropriate paperwork to evict Francis, a Central American immigrant, and eviction was avoided that day. Had he brought the proper documents, the policemen would have walked through the marching protesters to arrest various the members and allies of HYPERLINK “http://clvu.org/”City Life/Vida Urbana (CLVU), an affordable housing and tenants’ rights organization, who had volunteered to stand peacefully in the way of eviction. The eviction and the arrests, had they occurred, would have been captured by news cameras and print reporters, and it would have been another devastating loss for a family in bank foreclosure. But all that was averted thanks to collective action and resistance that let the banks know that they could no longer easily upend peoples’ lives and avoid public relations debacles.

Tisa Taylor, whose home was saved by a similar action, but not before her father suffered a devastating stroke soon after the family home was foreclosed upon, explained why she took a day from work to attend the blockade: “I keep coming back to these actions to help because CLVU was there for us. I don’t want to see my neighborhood boarded up. I want to see my community flourish.”

NEW ORLEANS – It’s 11 a.m. on a Monday and Bernice Horne is sweeping the front porch. Inside, her son fixes himself a fast lunch—he’s on the clock— while her granddaughter readies for a class at the local community college. “Erica,” she calls. “Grab me a dust pan. We don’t need any more mess around here.”

The view from Horne’s front porch is bleak: a weedy lot; the dark, gutted house of a dead neighbor; and beyond that, a derelict subdivision stretching as far as the eye can see. Occasionally a bird swoops in or out of a broken window. A ripped chain-link fence borders the abandoned affordable-housing development, which never reopened after Hurricane Katrina forced its operator, the Housing Authority of New Orleans (HANO), to close it more than six years ago.

“One day my baby granddaughter was sitting out on the porch swing, and she said, ‘Why does that building have eyes? It looks like it’s looking at us,’ ” Horne, a retired school custodian, says. “I said, ‘Baby, they’re supposed to be windows and doors to keep little girls like you safe.’ ”

Horne used a grant supplied by the state to rebuild her tidy ranch-style house from the ground up after Katrina. For reasons both emotional and financial, she never seriously considered not doing so. “We don’t have any other place,” she says quietly. “This is where I raised my children. We can’t afford to go anywhere else.”

Upon her return, she installed a jungle gym in the backyard and, inside, a plush sofa with plenty of room for chatting with the neighbors she expected would return. They haven’t. The population of Horne’s neighborhood, Desire, has dropped 68 percent since 2000, falling from 3,791 to 1,213 in 2010, U.S. Census data show. Where there were once occupied homes, weeds grow. The only commercial establishment for miles is the Money and Honey One Stop, a concrete-fronted corner store with unpredictable hours and an inventory heavy on 99-cent soda and hot potato chips.

Though New Orleans Mayor Mitch Landrieu’s recovery plan includes putting a $11 million community center and health clinic in this Upper 9th Ward neighborhood, the only city project to be completed so far is a modestly outfitted park with a small swimming pool, a few sports fields and a Kaboom playground donated to the neighborhood. On warm fall evenings, the sound of children playing football reverberates through otherwise quiet streets.

Exactly how gay populations affect the urban housing market is something of an open question. On one hand, surveys have found that gays and lesbians believe they’ve been HYPERLINK “http://psychology.ucdavis.edu/rainbow/html/Herek_2007_JIV_preprint.pdf”targets of housing discrimination at times [PDF]. If a neighborhood doesn’t want gay people to live there, one might expect its average home values to drop. On the other hand, research from 331 metro areas by our own Richard Florida has found that artist and gay populations HYPERLINK “http://creativeclass.com/rfcgdb/articles/oxford%20journal.pdf&#8221;increase housing prices in urban neighborhoods [PDF], because these groups produce amenities that are at a premium and reflect a tolerance that facilitates the exchange of knowledge and ideas.

New research, scheduled for publication in the HYPERLINK “http://www.sciencedirect.com/science/article/pii/S0094119011000581″March 2012 issue of the Journal of Urban Economics [HYPERLINK “http://econ.tulane.edu/LeguizamonSJ_Influence.pdf”pre-press PDF], tries to settle these conflicting findings by focusing on a single city: Columbus, Ohio. The leaders of the study, economists David Christafore of Konkuk University in Korea and Susane Leguizamon of Tulane University, wanted to see if home values in various neighborhoods of Columbus responded differently to the presence of gay populations. They wanted to discover whether any real estate fluctuations might turn on a single key factor: the neighborhood’s sociopolitical slant.

The affordable housing movement has not only accepted green building, but is making it integral to its work.

By Noreen Beatley ShelterforceFall 2011

For a long time, green building was seen as a luxury. However, over the past 5 to 10 years affordable housing advocates have steadily figured out that a great majority of “green building” is in fact common sense that supports quality affordable housing: better windows, more insulation, construction materials that don’t make residents sick, improved ventilation, better lighting, and greater access to the surrounding community and transportation. Green and affordable pioneers have been steadily bringing these standards into all corners of the industry.

Evolution of Green Building

Green building originated out of energy conservation efforts of the 1970s. While many of those initial efforts fell to the wayside once energy costs became cheaper and more stable, cities such as Austin, Texas, and Boulder, Colo., continued to focus on ways to increase the energy efficiency of the homes and buildings in their community. In 1985, Austin adopted its first energy code and began rating single-family homes on their energy performance; within five years, the program had expanded to include water conservation, efficient materials use, and solid waste handling.

THERE are said to be at least 105 million and maybe as many as 2 billion parking spaces in the United States.

A third of them are in parking lots, those asphalt deserts that we claim to hate but that proliferate for our convenience. One study says we’ve built eight parking spots for every car in the country. Houston is said to have 30 of them per resident. In “Rethinking a Lot,” a new study of parking, due out in March, Eran Ben-Joseph, a professor of urban planning at M.I.T., points out that “in some U.S. cities, parking lots cover more than a third of the land area, becoming the single most salient landscape feature of our built environment.”

Absent hard numbers Mr. Ben-Joseph settles on a compromise of 500 million parking spaces in the country, occupying some 3,590 square miles, or an area larger than Delaware and Rhode Island combined. If the correct number is 2 billion, we’re talking about four times that: Connecticut and Vermont.

The U.S. Supreme Court hears arguments Monday in a case near and dear to EPA haters.

It would seem to be a David-and-Goliath case that pits a middle-class American couple trying to build their dream home against the Environmental Protection Agency. But the couple, Michael and Chantell Sackett, is backed by a veritable who’s who in American mining, oil, utilities, manufacturing and real estate development, as well as groups opposed to government regulation.

On one side of the kaleidoscope, this is a case of bureaucratic power run amok. On the other side, it is a trumped-up case aimed at eviscerating the EPA’s regulatory powers.

For the first time since 1999, city planners are pushing for changes to regulations that would pave the way for denser development, including townhomes and multi-family properties, through much of Houston.

The proposed changes to the city’s development code, known as Chapter 42, would be the first steps toward denser Houston development since a heated battle led to the creation of an inside-the-Loop “urban area” in 1999.

Now, officials want to extend that urban area and its accompanying density cap – allowing a maximum of 27 housing units per acre – from Loop 610 to Beltway 8. The change would come with a series of updates to the existing development code, including community safeguards to make it easier for residents to protect the character of their neighborhoods even as the ordinance would allow developers to subdivide lots for more construction, officials said.

Houston’s new home market will grow by 10 percent this year, a local housing analyst said today.

Mike Inselmann, president of Houston-based HYPERLINK “http://www.metrostudyreport.com/”Metrostudy told a real estate luncheon crowd that there are plenty of reasons to be optimistic demand for new homes will improve this year.

“We’re in the midst of an economic recovery,” he said during an annual forecast presentation. “We have the oil and gas industry to thank for that.”

Single-family home starts and sales will reach at least 20,000 this year, Inselmann predicted.

Strong demand for apartments is expected to boost the new home market as rents rise, encouraging renters to buy homes.

“We’re beginning to see the pendulum shift toward the economics of home ownership again,” Inselmann said.

There are still plenty of doubters.

A survey of those who attended today’s event showed 40 percent believed new home sales will fall this year.

GALVESTON — Signs will go up by the end of the week marking properties proposed as sites for public housing.

The homes on scattered sites are part of the Galveston Housing Authority’s plan to rebuild 569 public housing units that were flooded and later demolished.

Of the 569, housing authority officials have said they want to build single-family or duplex developments at 50 scattered sites.

Unlike traditional public housing developments, the units are scattered in neighborhoods throughout the city to avoid concentrations of poor, but the initiative still has sparked controversy.

Since letters were mailed to houses near 12 of the proposed sites in the first round, housing authority officials have been fielding objections. Some critics are pointing to the delayed city disaster housing recovery program, which rebuilds and rehabilitates homes destroyed in the storm.

The builders selected for scattered site construction, Sullivan Land Services and DSW Homes, also are contractors in the city housing program.

Neither builder is behind on construction in the housing program, the builders said.

“There are a variety of hurdles in the city program,” Billy Sullivan, of Sullivan Land Services, said. “Those delays will be minimized in this program.”

GALVESTON — The Galveston City Council will consider a resolution Thursday that could threaten the Galveston Housing Authority’s plan to build mixed-income developments on the island.

Council members Elizabeth Beeton and Steve Greenberg are asking the council to consider a resolution that asks the state to suspend tax credits for low-income housing developments for three years.

If tax credits are suspended, the developments, a blend of market rate, tax-credit and public housing units, could be less economically feasible.

But supporters of the proposal said the resolution could not only set back the plan to rebuild some of the 569 public housing units destroyed during Hurricane Ike in 2008 but also stonewall other developers from investing on the island.

The number of homeless veterans in the United States declined by nearly 12 percent between January 2010 and January 2011, according to figures being released Tuesday by the Department of Veterans Affairs and the Department of Housing and Urban Development.